I received an email from USAA that says they are offering, to a limited group, a new 2.5% cash back credit card. The fine print makes it appear as though this is a pilot program, and I was wondering if anyone had researched this and compared it to other credit card offers. Ultimately, I'll need to decide if this is better than our $100 annual fee, Chase/United mileage credit card. My gut feeling is that it is, and personally I'd rather get cash back than have to deal with miles.

Card earns at the following rates:
2.5% cash back on all purchases if you have a $1,000 monthly direct deposit into your USAA checking account
1.5% cash back on all purchases if you don’t receive the monthly direct deposit
No annual fee
No sign up bonus
Chip & PIN
No foreign transaction fees
You must be a USAA member to apply for the card

This is a pilot program and not available to most USAA members. If you’re eligible you should see it on the mobile application (account overview page) when you’re logged in.

It seems as though the offer is by invitation only, at least for now. I received an email and I also logged into my USAA app, where it popped up there as well. The credit card is not showing on their website as one of their credit card offerings.

sperry8 wrote:Great rate but the direct deposit requirement rules me out. Retirees don't get direct deposit. Why make such a requirement and rule out all retirees?

A retiree can receive direct deposit of Social Security, pension, and annuity payments and direct deposit of any automatic withdrawals arranged with an investment company. There are probably others. If you are currently receiving checks in the mail for such things direct deposit might be a good idea to prevent stolen or lost checks, issues with change of address, and so on.

i never thought i was worth it to pay my federal taxes with a 2% cash back card..... at 1.87% fee for pay1040.com....

but at 2.5%... that is .63% cash back. lets just say even for a 100k income person... and owing 10k... that is a 63 dollar dinner for paying taxes with a credit card.

Exactly. I actually had trouble using the 1.87% fee guys this quarter and used the 1.99% guys. Hope that doesn't happen again. Either way, it's a heck of a lot more convenient than mailing it in and you still get the float.

BTW, those fees are tax deductible, but subject to the 2% floor. For the right person, that could make a big difference.

White Coat Investor wrote:
Exactly. I actually had trouble using the 1.87% fee guys this quarter and used the 1.99% guys. Hope that doesn't happen again. Either way, it's a heck of a lot more convenient than mailing it in and you still get the float.

BTW, those fees are tax deductible, but subject to the 2% floor. For the right person, that could make a big difference.

I also had trouble with the 1.87% company but it turns out that if your estimated tax payment is high enough (I don't know the minimum $ amount that triggers this), you actually have to call in and make the payment with a live person on the phone.
Since my tax bill was quite high, it was worth the hassle rather than going with the 1.99% company.

White Coat Investor wrote:
Exactly. I actually had trouble using the 1.87% fee guys this quarter and used the 1.99% guys. Hope that doesn't happen again. Either way, it's a heck of a lot more convenient than mailing it in and you still get the float.

BTW, those fees are tax deductible, but subject to the 2% floor. For the right person, that could make a big difference.

I also had trouble with the 1.87% company but it turns out that if your estimated tax payment is high enough (I don't know the minimum $ amount that triggers this), you actually have to call in and make the payment with a live person on the phone.
Since my tax bill was quite high, it was worth the hassle rather than going with the 1.99% company.

Interesting. I had no trouble in June paying the same high amount. Maybe I'll try that in January.

Bank of America has a 2.625% cash back rate on their travel rewards card if you qualify for platinum preferred honors. You can qualify for this by moving 100k worth of shares to Merril Edge. There are also higher cash back rates available in specific spending categories.

sperry8 wrote:Great rate but the direct deposit requirement rules me out. Retirees don't get direct deposit. Why make such a requirement and rule out all retirees?

Are you a military retiree?

No, my father was in the military and that is how I qualified.

dbr wrote:

sperry8 wrote:Great rate but the direct deposit requirement rules me out. Retirees don't get direct deposit. Why make such a requirement and rule out all retirees?

A retiree can receive direct deposit of Social Security, pension, and annuity payments and direct deposit of any automatic withdrawals arranged with an investment company. There are probably others. If you are currently receiving checks in the mail for such things direct deposit might be a good idea to prevent stolen or lost checks, issues with change of address, and so on.

Note: "If you do not comply, the Treasury Department will contact you directly and may send you a Direct Express® card."

I do not get social security or pension. I retired before 65 and am not yet eligible. I have no way to get anything directly deposited. Not sure why USAA would want to block me (and others like me) from the cc

I spoke with a USAA rep Saturday and was told 1000 members were selected (rep couldn't tell me how pilot group was selected or what the criteria was) for this card as a pilot program and that potentially the card would be offered out/available ~June 2017 to other members.

dekecarver wrote:I spoke with a USAA rep Saturday and was told 1000 members were selected (rep couldn't tell me how pilot group was selected or what the criteria was) for this card as a pilot program and that potentially the card would be offered out/available ~June 2017 to other members.

Oh well

I'll check with them after Oct28 anyway based on the forum post from doctorofcredit.

SGM wrote:What are the 1.87% fee guys vs. the 1.99% fee guys referring to? Is this a fee for paying your estimated taxes to the IRS via credit cards?

Yes, it is the fee for paying by credit card. It makes such means of payment uneconomical unless it is a path to something like meeting the minimum spend to get 100,000 AMEX points on a new credit card. Even if you use a 2% cash back card it makes no sense because getting cash back does not mean you did not spend the money. Since you can direct debit your checking account at no cost, why not do that?

SGM wrote:What are the 1.87% fee guys vs. the 1.99% fee guys referring to? Is this a fee for paying your estimated taxes to the IRS via credit cards?

Yes, it is the fee for paying by credit card. It makes such means of payment uneconomical unless it is a path to something like meeting the minimum spend to get 100,000 AMEX points on a new credit card. Even if you use a 2% cash back card it makes no sense because getting cash back does not mean you did not spend the money. Since you can direct debit your checking account at no cost, why not do that?

This makes no sense. Lets say you going to pay 1k on taxes. You pay 1,018.7 and get back 20.37 in cash back on a 2% card. So you profit 1.67, which isn't much but you just made some money by paying your taxes. I use a CC anytime the rewards are more than the fee to use it, if there is one. Now you are right if you are doing it for a signup bonus it is much more lucrative.

Still in the pilot phase. Supposedly available to everyone "early next year" and they are planning "big exposure" for it, so it sounds like it'll be hard to miss when it is available. They could not get me into the pilot program.

SurferLife wrote:I'll need to decide if this is better than our $100 annual fee, Chase/United mileage credit card. My gut feeling is that it is, and personally I'd rather get cash back than have to deal with miles.

Airline cards are a bad deal for all but the heaviest spenders or those who have special travel situations. Even a 1.5% cash back card is a better deal than airline cards for nearly all average spenders. Promotional sign-up bonuses are worthwile if you cancel the card before the annual fee.

SurferLife wrote:I'll need to decide if this is better than our $100 annual fee, Chase/United mileage credit card. My gut feeling is that it is, and personally I'd rather get cash back than have to deal with miles.

Airline cards are a bad deal for all but the heaviest spenders or those who have special travel situations. Even a 1.5% cash back card is a better deal than airline cards for nearly all average spenders. Promotional sign-up bonuses are worthwile if you cancel the card before the annual fee.

2.5% cash back is better than 1 United point per dollar spent. That said, if you find yourself paying baggage fees on United, you should consider that in your calculation as $90 is equivalent to $3600 in spending.

Are first responders eligible to sign up with USAA, or only military? I've been curious about their insurance policies.

Even if you can't get the 2.5% cash back card, you can get the Citi "double cash" credit card (2% back on all spending, no yearly fee) and Ally offers 1% back on savings accounts. If the USAA account doesn't give you anything back, you're probably better off with Citi and Ally.

Geneyus wrote:Are first responders eligible to sign up with USAA, or only military? I've been curious about their insurance policies.

Even if you can't get the 2.5% cash back card, you can get the Citi "double cash" credit card (2% back on all spending, no yearly fee) and Ally offers 1% back on savings accounts. If the USAA account doesn't give you anything back, you're probably better off with Citi and Ally.

No, the organization serves current military and military veterans and their families. Originally membership was for officer grades only. At one point access was expanded to non-military for some banking services, but this has since been restricted again.

SurferLife wrote:I'll need to decide if this is better than our $100 annual fee, Chase/United mileage credit card. My gut feeling is that it is, and personally I'd rather get cash back than have to deal with miles.

Airline cards are a bad deal for all but the heaviest spenders or those who have special travel situations. Even a 1.5% cash back card is a better deal than airline cards for nearly all average spenders. Promotional sign-up bonuses are worthwile if you cancel the card before the annual fee.

2.5% cash back is better than 1 United point per dollar spent. That said, if you find yourself paying baggage fees on United, you should consider that in your calculation as $90 is equivalent to $3600 in spending.

You can own the travel card and pretty much not use it. If you get a couple bags/yr free, the card pays for itself.

Is this card now available in CA? I just visited USAA and after I logged out I noticed a little "Want a card? We have a special offer..." box - I clicked it

It look me to a very generic questionnaire where I entered my state of residence, my credit score and anticipated monthly spending. And it presented the "2.5% Limitless cash back card - Apply Now!"

I must unfreeze my credit first so I want to be certain this is for real.

EDIT: I just went back into my account and looked at my offers and other available cards, it is not there. But the tab with my 2.5% offer/suggestion is still open. I need to head to work in half and hour, I suspect I'll miss my chance this time

sunny_socal wrote:Is this card now available in CA? I just visited USAA and after I logged out I noticed a little "Want a card? We have a special offer..." box - I clicked it

I have this offer, and in the fine print, footnote #1 states "This product is currently available to members residing in the following states: AL, AZ, CO, GA, ID, IN, KS, LA, MI, NM, PA, SC, TN and WA. It will become available in additional states at a later date."

Thanks for reviving this thread. I have been periodically checking the USAA site to see if it was available in my state. My state just became eligible and I was able to apply via the iPhone app today at work.

Even with a "active duty credit alert" in my file, it was a painless application and approval. The 2.5% cash back, no FTFs, and USAA CS makes it a good card for me.

TF Hutch wrote:My AAA MasterCard pays 3% cash back on "qualified" purchases. Pays to the penny to your bank account.
Card cost <$5 to open, gives you a $50 AAA credit
The best Travel card I could find.

What exactly are "qualified" purchases? The Chase 5% card sounds great, until you see what the rotating categories are. I went back over several months to see what my rewards were with the 5% cash back categories, and I would've gotten a lot more money if I just had 2% back on everything. After seeing that, I went with the Citi DoubleCash credit card (2% back on everything, no exceptions). It's a great card for those who aren't USAA members and can't get the 2.5% card.

From the USAA 2.5% Cash Back Credit Card's terms and conditions:
"Qualifying Purchases are the Purchases that post to your Account, less any Purchase credits, returns, or other adjustments that are not payments.

Qualifying Purchases do not include: Balance Transfers, Cash Advances (including Convenience Checks), ATM Cash Disbursements, Money Transfers, Truck Stop Transactions, Gaming Transactions, Finance Charges, Fees, and purchases of other cash equivalents, even if used to purchase goods or services.
Transactions that are not Qualifying Purchases do not earn any Cash Back".